Deck 4: The Economic Environment

Question 1

The free trade area defined by NAFTA as the United States, Mexico, and Canada is the only free trade zone in the world.

Answer 1

False

Question 2

Three of the five major industrialized countries in the world include Chile, Canada, and Mexico.

Answer 2

False

Question 3

As the life expectancy in a market extends and new target markets become available, international marketers may be able to extend product life cycles by marketing them abroad.

Answer 3

True

Question 4

The United States is the world's largest producer of goods with over ten trillion dollars in Gross Domestic Product (GDP), almost double that of the second largest producer, China.

Question 5

The ratification of EFTA created the world's largest free market with 390 million consumers.

Question 6

With its diamond mines and rich natural resources, Africa remains the richest continent on earth.

Question 7

Engel's laws state that as a family's income rises, the percentage of the money it spends on food will increase because of the reliance on buying prepared food out of the home, i.e. restaurants and bistros.

Question 8

India has more middle class consumers than Germany.

Question 9

A household refers to only related people who live in the same housing unit.

Question 10

Purchasing power is a function of three distinct elements: available resources, temperate climate, and categorical supply.

Question 11

The industrialization of Third World countries has cut the birth rate by almost two-thirds, keeping the overall world population constant over the last decade at three billion people.

Question 12

The availability and quality of an infrastructure is critically important in evaluating marketing operations abroad.

Question 13

The main dimensions of a market can be captured by considering the population and its various characteristics, the country's infrastructure, the geographical features of the environment, and the amount of foreign involvement in the economy.

Question 14

Maquiladoras are landscape engineers who make sure that the Free Trade areas along the border are neat and clean so more companies will choose to trade with each other.

Question 15

The most basic indicator of market potential is income.

Question 16

Singapore has successfully attracted foreign investment, mostly regional corporate headquarters and knowledge-intensive industries, and has served as one of the main gateways for Asian trade.

Question 17

PQLI is a composite measure of the level of welfare in a country.

Question 18

Despite U.S. fears of rapid job loss if companies would send business south of the border, recent studies have declared the job gain or loss almost a wash-out.

Question 19

More people live alone in Norway and Germany than any place else on earth.

Question 20

Purchasing Power Parities (PPP) is the amount of currency which, when converted into the floating U.S. dollar, equals the projection of stabilized currency as set by the Federal Reserve in compliance with the World Bank.

Question 21

The assessment of a foreign market environment should start with:

A) a monetary analysis of the currency fluctuation.
B) the evaluation of economic variables relating to the size and nature of the markets.
C) a description of the seasonal expenditures of total GDP.
D) expert testimony from witnesses.

Question 22

Which of the following is the term used to describe all the people, both related and unrelated, who occupy a housing unit?

A) Household
B) Roust gathering
C) Unit of living
D) Lifegroup

Question 23

Which country is the world's largest exporter of textiles since beginning to increase production in the 1980s?

A) Japan
B) China
C) Philippines
D) Africa

Question 24

Which organization is represented by the acronym OPEC?

A) Overall Project to Evaluate Currency
B) Oil Production Economic Council
C) Original Political Executive Council
D) Organization of Petroleum Exporting Countries

Question 25

One reason that the U.S. dollar may distort real income and standard of living figures in foreign countries is that:

A) most countries have their own currency.
B) the U.S. stock market has been devalued in recent years.
C) gold is no longer used to back the dollar.
D) the dollar value fluctuates.

Question 26

Purchasing power is a function of income, prices, savings, and what other variable?

A) postal rates
B) education
C) credit availability
D) natural resources

Question 27

One good way to understand the main dimensions of a market is to study the:

A) population.
B) gift-giving customs.
C) building materials used in houses.
D) number of pets per household.

Question 28

What phenomenon has radically changed consumption patterns over the last few decades?

A) Urbanization
B) Political dissidents
C) The greening of the globe
D) Professional sports heroes

Question 29

In 1999, a milestone in world population was reached. How many persons live on our planet based on the estimate done during that year?

A) 500 million
B) 1 billion
C) 300 million billion
D) 6 billion

Question 30

Which of the following are two factors that have affected the average size of households?

A) World War I and World War II
B) Standardization and industrialization
C) Television and telephone prevalence
D) Increased number of divorced and sole survivor households

Question 31

Name the three secondary sources of information that are a good starting point for marketers to investigate when researching an emerging economy.

A) Television, mall interviews, and computers
B) World Bank files, United Nations publications, and country Statistical Abstracts
C) Personal interviews, questionnaires, and focus groups
D) Century statistics, population figures, and phone surveys

Question 32

The number of people in a particular market provides what indicator of market size?

A) Ethnic cuisine
B) Electricity usage
C) Population
D) Government regulation

Question 33

What is the name of the law that states that as a family's income increases, the percentage spent on food will decrease?

A) Consumption Law
B) Engel's Law
C) The Law of Diminishing Returns
D) Case Law

Question 34

The term used to describe how many units of currency are needed in one country to buy the amount of goods and services that the same unit of currency will buy in another country is called:

A) currency.
B) the exchange rate.
C) purchasing power parities.
D) value added.

Question 35

In what country or are is the greatest population explosion predicted to occur within the next 25 years?

A) Georgia
B) Developing countries
C) Australia
D) United States

Question 36

Which of the following is noted as a way that marketers can extend the lifecycles of their products?

A) Renaming the products
B) Lowering the prices
C) Decrease production
D) Marketing products abroad

Question 37

Which Southeast Asian country serves as a hub in the region for rapidly industrializing nations, providing financial and managerial services to the other markets?

A) Singapore
B) Hawaii
C) British Honduras
D) New Zealand

Question 38

Which continent is the poorest and owes the rest of the world $375 billion, yet may also provide the biggest potential market opportunity for marketers in the twenty-first century?

A) Australia
B) Asia
C) Eurasia
D) Africa

Question 39

The Group of Five are:

A) money managers who regulate worldwide currency rates.
B) money, markets, media, message, and methodology.
C) the United States, Britain, France, Germany, and Japan.
D) automobiles, trains, boats, planes, and waterways.

Question 40

Apart from population, which indicator is most indicative of the market potential for most consumer and industrial products and services?

A) Voter turnout
B) Education levels
C) Live span
D) Income

Question 41

Which relatively new technology will change the worldwide infrastructure landscape?

A) Free drying.
B) Vacuum packaging.
C) Desalinization.
D) Wireless technology

Question 42

Two major governmental problems that international marketers must be aware of when considering foreign markets are the:

A) specified ages of adulthood and marriage.
B) inflation and debt problems of the country.
C) language barriers and taxation laws of the country..
D) laws surrounding volunteerism in the country and traffic patterns of the major industrial cities.

Question 43

List and briefly describe the five elements of success that are required for an international marketer to take advantage of and thrive in developing markets.

Question 44

How many cell phones were estimated to be in use worldwide in 2008?

A) 1 per household
B) 3 billion
C) 900 million
D) 500 million

Question 45

One characteristic of this trade agreement is that it established a common trade policy with respect to nonmembers.

A) NAFTA
B) ASCAP and BMI
C) NAACP
D) Customs Union

Question 46

A true economic union requires the trading countries to integrate:

A) economic policies.
B) marriages.
C) university degrees.
D) transportation authority.

Question 47

Which of the following is best described as a "dynamic marketplace in which all restrictions and barriers among member countries are removed"?

A) Autocracy
B) Bilateral infrastructure
C) Free trade area
D) California

Question 48

Which of the following is the currency that was created by the European Union?

A) Dogma
B) Euro
C) Francpence
D) the "Pauper's Mill"

Question 49

Which three countries were involved in NAFTA and what are the characteristics of that agreement?

Question 50

For international marketers, the marketing term PQLI is an acronym for:

A) Politically Quick Little Infrastructure.
B) Post Quebec Language Instrument.
C) Physical Quality of Life Index.
D) Personal Qualities and Language Indicator.

Question 51

Describe the three types of unions that were discussed in the text and that relate to trading partnerships between countries.

Question 52

What basic networks of transportation are essential for physical distribution?

A) Internet, fiber optics, and satellite
B) Roadways, bridges, and traffic control
C) Land, rail, waterway, and air
D) Tokens, tickets, and passes

Question 53

A country's use of computers, telephones, broadcast media, and print media is an indicator of what infrastructure element?

A) Passive consumers
B) Communications
C) Neighborhoods
D) Universities

Question 54

_____________ are factories located along the U.S. and Mexico border that integrate cheap Mexican labor with high-end American technology.

A) Plaza Palominos
B) Refractoriums
C) Maquiladoras
D) Partido Revolutionario Institucional (PRI)

Question 55

What infrastructure element is vital for a vibrant agricultural market?

A) Developed roads
B) Cropdusters
C) Moonlight harvesting
D) Bridge.

Question 56

Market information on the percentage of households that own a particular product is known as:

A) product categorization.
B) product saturation or diffusion.
C) taxable income.
D) suspended products.

Question 57

Data on the availability of _______ (marketing-related) infrastructure are often not readily available.

A) power
B) commercial
C) Non-commercial
D) transportation